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PREP Act Exclusivity Dominates Nursing Home Covid Death Argument

June 23, 2021, 5:12 PM

Three Third Circuit judges focused Wednesday on whether a special law designed to kick in during public health-care emergencies requires lawsuits involving nursing home residents’ Covid-19 deaths to be tried in federal court.

It’s a case that will have important ramifications for the long-term care industry, which provides vital health-care services but faces claims throughout the country that it didn’t do enough to stop the spread of coronavirus during the early days of the pandemic.

Questions over the preemptive scope of the Public Readiness and Emergency Preparedness Act and the immunity it provides are likely to go to the U.S. Supreme Court, as at least five other federal circuits are hearing similar claims.

Judges Michael A. Chagares, David J. Porter, and Jane R. Roth appeared to listen carefully to arguments over whether the state-law wrongful death cases were properly removed to federal court, under the federal officer removal law.

The parties disagreed over whether the nursing homes were doing the government’s job or just complying with regulations, but the judges seemed more interested in the attorneys’ arguments about the PREP Act.

‘Once-in-a-Lifetime’ Event

The PREP Act gives “covered entities,” including nursing homes, immunity from claims arising from the administration or use of “covered countermeasures,” such as vaccines, personal protective equipment, and medications.

It provides a carveout for willful misconduct claims, which must be filed in the U.S. District Court for the District of Columbia. There is a federal fund to compensate those claims.

Congress specifically designed the law to provide a federal response to “once-in-a-lifetime” events, like the pandemic, Lann McIntyre, an attorney for nursing home operator Alliance HC Holdings Inc., told the U.S. Court of Appeals for the Third Circuit.

The history and text of the law clearly indicate that Congress intended for the Health and Human Services secretary to have broad emergency powers under the law, and for the law itself to be applied broadly to ensure a uniform federal response, she said.

The PREP Act so completely preempts state law in this area that it provides an exclusive federal cause of action that must be heard in federal court, she said.

No Cause of Act

The wrongful death cases belong in state court because the PREP Act doesn’t supply the plaintiffs with an exclusive federal cause of action or a federal remedy, Neil R. Lapinski told the court.

Lapinski represents the estates of Joseph Maglioli and other nursing home residents who died of Covid-19 related injuries in April and May 2020.

The issue on appeal is whether the PREP Act gives federal courts exclusive jurisdiction to hear the lawsuits. Lapinski argued the act doesn’t completely preempt the field because it wouldn’t apply to his client’s claims.

Lapinski focused on PREP Act language giving covered entities immunity for the “administration or use” of a covered countermeasure intended to help fight a public health emergency. Maglioli and the others weren’t administered or using covered countermeasures, he said.

Additionally, a carveout that allows people to file injury claims when a covered entity allegedly engaged in willful misconduct requires plaintiffs to file a physician’s affidavit that they were injured by a provider’s administration or use of such a countermeasure, Lapinski said.

Maglioli and the others couldn’t do that because they weren’t injured as the result of the administration or use of a covered countermeasure, Lapinski said. Thus, they couldn’t have sued under the willful misconduct exception and wouldn’t have had access to the victim’s compensation fund, he said.

HHS Opinion

The judges asked about an HHS’s Office of General Counsel opinion clarifying that the law’s “administration or use” language also covers decisions not to administer or use covered countermeasures in order to preserve scarce supplies.

That opinion isn’t entitled to deference, Lapinski said.

But McIntyre countered that it was within the secretary’s power to interpret the PREP Act to apply to non-use, and the opinion was entitled to deference.

The plaintiffs’ allegation that the nursing homes failed to protect residents when they gave masks only to registered nurses, not to others within the facilities, would be preempted as a non-use because it was a “classic” allocation-of-scarce-resources decision that falls within the law, McIntyre said.

McIntyre is with Lewis Brisbois Bisgaard & Smith LLP. Lapinski is with Gordon, Fournaris & Mammarella PA.

The case is Estate of Maglioli v. Alliance HC Holdings, LLC, 3d Cir., No. 20-2833, oral arguments 6/23/21.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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